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Exploring auditor independence:
an interpretive approach
Exploring
auditor
independence
Mohammad Hudaib
Essex Business School, University of Essex, Colchester, UK, and
221
Roszaini Haniffa
Bradford University School of Management, Bradford, UK
Received 4 January 2005
Revised 20 May 2007
Accepted 20 August 2008
Abstract
Purpose – The purpose of this paper is to explore the construction of the meanings of auditor
independence (AI) in an oil-rich autocratic state with an ideology straddling liberal market capitalism
and Shari’ah (Islamic teachings).
Design/methodology/approach – The concept of AI was explored using Blumer’s interactionist
approach or the Chicago School of Symbolic Interactionism (CSSI). Multiple methods were adopted in
collecting and interpreting data: document analysis, personal professional experience, observation and
interviews with auditors in two audit firms in Saudi Arabia.
Findings – Using discourse analysis, the paper demonstrates that auditors construct the meanings of
independence in appearance and in fact through their social interactions at three levels: micro
(personal self-reflexivity through ethical reasoning and reputation of individual auditor); meso
(organisational culture through range of commercial activities and image management) and macro
(through political, de jure, and socio-economic structure).
Originality/value – The paper contributes to the auditing literature by providing insights into the
construction of the meaning of AI in a context different from the dominant Anglo-American discourse,
as well as transition and emerging economies discourse. The paper also contributes to the CSSI
research methodology by extending it to consider interactions not only within an organisational
context, but also within the context of a country.
Keywords Auditing, Ethics, Religion, Saudi Arabia
Paper type Research paper
Introduction
The concept of auditor independence has a long history and still remains a contentious
concept today. In the early twentieth century, the concept of independence was
associated with correct character and state of mind of the accountant through
exhortations of duty and loyalty[1]. Hence, independence was assumed to mean
integrity, honesty, and objectivity, including freedom from the control of those whose
records are being reviewed. Carey and Doherty (1966, p. 39) addressed the concept as
“. . . an attitude of mind, much deeper than the surface display of visible standards.”
Discussion on auditor independence then evolves around two forms: “independence in
fact” and “independence in appearance”. The former requires auditors to form and
express an opinion in the audit report as a disinterested and expert observer,
uninfluenced by personal bias during the audit engagement (Arens et al., 2002), while
The authors gratefully acknowledge the helpful comments and suggestions of the anonymous
reviewers and the Editor (Professor Lee Parker).
Accounting, Auditing &
Accountability Journal
Vol. 22 No. 2, 2009
pp. 221-246
q Emerald Group Publishing Limited
0951-3574
DOI 10.1108/09513570910933951
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the latter expects auditors to avoid situations that might cause others to conclude that
they are not maintaining an unbiased, objective attitude of mind (Porter et al., 2003).
Because of the intangibility of the concept of auditor independence as well as
change in the work environment[2] auditor independence which was once considered
as a moral-ethical position has now been largely conceived as an object that can be
regulated (or self-regulated) through standards promulgated in codes of ethics and/or
government regulation, and checked on and verified through reviews (Gendron et al.,
2006). Despite the effort of professional bodies in developed countries in addressing the
various threats and safeguards to independence via various codes (e.g. the Professional
Code of Conduct (US), the Members’ Handbook (UK) and the Code of Ethics for
Professional Accountants (IFAC)) and regulations, they are still susceptible to
corporate scandals. Yet, these codes and regulations are embraced by many developing
countries, including those undergoing transition from centrally planned to market
economies, such as in Central and Eastern Europe and China, as part of the
globalisation process.
A large volume of research on auditor independence concentrates on exploring
perceptions of interested parties on auditor-client relationships[3] based on threats and
safeguards in the various codes (see for example Knapp (1985), on the USA; D’Silva
(1992), on the UK; Gul and Tsui (1992), on Hong Kong; Teoh and Lim (1996), on
Malaysia; Gorman and Ansong (1998), on Canada) using the positivist approach.
Although the results of such studies inform us of the perceptions of various groups,
they fail to consider many other factors within the context of the countries examined,
such as the political and socio-economic structure, organisational culture and societal
and individual values that may have shaped the subjects’ perceptions (Puxty, 1993;
Puxty et al., 1997) on situations that may or may not impair auditor independence.
Understanding the context is important because auditor independence is not only a
technical concept, but also a cognitive and cultural concept (Wolnizer, 1987).
Context-based studies in auditing are now receiving more attention. Power (2003)
provided a critical review of contextual studies related to the role of auditing and
production of legitimacy around four main themes: the audit process and formal
structure (Dirsmith and McAllister, 1982; Cushing and Loebbecke, 1986; Dirsmith and
Haskins, 1991; Carpenter and Dirsmith, 1993; Francis, 1994); auditing as a business
(Humphrey and Moizer, 1990; McNair, 1991; Fischer, 1996; Jeppesen, 1998; Power,
2000); working papers and image management (Collins, 1981; Pentland, 1993); and new
audits (Power, 1996; Radcliffe, 1998, 1999). Similarly, the emerging interest in
transition economies has resulted in increased attention in country context-based
studies (see Hao (1999), on China; Sucher and Bychkova (2001), on Russia; Sucher and
Kosmala-MacLullich (2004), on the Czech Republic; Kosmala (2007), on Poland and the
Czech Republic).
Despite the growth in the auditing literature on context-based studies, there has
been little effort in understanding how the “meaning” of an auditing concept such as
auditor independence is constructed in a context different from the Anglo-American
model (democratic, predominantly capitalist, stronger tendency to protect
shareholders, influential professional accounting bodies, reliance on terms such as
“true and fair” based on considerations of economic substance over and above legal
form), continental European model (stronger tendency to protect creditors, stronger
reliance upon government with small input from the accounting profession, dominance
of tax rules), transitional economies model (those experiencing change in political
ideology and economic system such as in the Central and European region, Russia and
China), and other developing economies model such as in Malaysia and Singapore
(semi-democratic, dominance of both foreign capitalist and local capital élites, stronger
government intervention with large input from international bodies, semi-strong
capital markets).
Hence, this paper attempts to address the gap in the literature by investigating how
the meaning of auditor independence is constructed in the context of autocratic
oil-based economies with strong state control and traditional/familial culture
straddling liberal market capitalism and Islamic ideology, such as in the Arabian
Gulf States[4], using the interpretive approach[5]. We are particularly interested in
exploring how auditors articulate the notion of auditor independence in the context of
their social interactions in such an environment, using Saudi Arabia as our case study.
Saudi Arabia was selected because it shares similar characteristics with its
counterparts in the Arabian Gulf region, namely, autocratic political structure with all
socio-economic institutions under the leadership of certain families selected by the
ruling family; oil-based economy; and common societal values. However, it is also
relatively unique as it has a fairly different system of religious involvement in political
and socio-economic affairs and is recognised as one of the most corrupted amongst the
Arabian Gulf States[6], making it an interesting case study in its own right.
Since we are interested in understanding and explaining the social world primarily
from the point of view of the actors directly involved in the social process (Burrell and
Morgan, 1979), we adopted an interpretive approach based on the Chicago School of
Symbolic Interactionism (CSSI) to study the phenomenon, as it offers the prospect of
reflecting some of the complexity and richness of the environments within which
auditing is being practised (Parker and Roffey, 1997). One of the researchers had the
opportunity to interview, observe and interact with members of two audit firms for a
total of 12 days to build an overall understanding of what influences their
interpretations for the construct of the meanings of auditor independence in their
everyday life. We also undertook document analysis of various texts to understand and
interpret the social, historical and cultural circumstances.
Our analysis indicates that auditors in Saudi Arabia construct their meanings of
auditor independence through their social interactions at three levels: micro (personal
self-reflexivity), meso (organisational culture), and macro (political and socio-economic
structure). At the micro level, we found “independence in fact” to be associated with
ethical and/or religious reasoning as well as the reputation of the individual auditor as
“man of honour”, especially the partner(s). At the meso or organisational level,
“independence in appearance” is associated with image management and level of
commercial activities. At the macro or country level, the political, ideological and legal
system, economic and business structure and societal values within the environment
affect various notions of independence and consequently, the meaning of AI. Our
analysis further revealed tension between two groups of practitioners; Islamist
practitioners who would like to see the Shari’ah concept of independence in all spheres
of life, including business and the profession vs the more powerful secular practitioners
who embraced capitalism and see religion as hindrance to progress.
The remainder of the paper is organised as follows. In the next section, we explain
our theoretical framework based on the premises of CSSI. The following section
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describes our research method, followed by discussion of the analysis in the next
section. The last section presents our conclusions and implications.
Theoretical framework
Auditors, as individuals, groups and sub-groups, through their interactions, construct
meanings based on their understanding, experience and interpretation of their
surroundings and actions at various levels. Hence, an interpretive approach may
provide the necessary framework to investigate how the meaning of auditor
independence is constructed in Saudi Arabia, and if the constructs are indeed different
from the dominant Anglo-American discourse and its implications on the audit
profession.
Interpretive (or natural) approaches primarily focus on people’s perceptions of
reality and on individual meanings (Hopper and Powell, 1985; Hopper et al., 1987), and
are rooted in hermeneutics (Puxty, 1993) and the verstehen tradition in sociology
(Schwandt, 1994). The approaches include grounded theory; ethnomethodology, which
focuses particularly on the everyday social practices of actors and how they choose to
do what they do (Chua, 1988); cognitive anthropology, which focuses on the
individual’s communicative competence within a particular culture (Jönsson and
Macintosh, 1997); and symbolic interactionism, which pays special attention to the
concepts and symbols that actors use to conduct their social life[7].
The CSSI is particularly appropriate in exploring how various groups in society act
towards their world, their interpretation of what confronts them, and how they
organise their actions on the basis of their interpretation, or in short, the lived
meanings of the concept of auditor independence to auditors. CSSI also recognises that
the meaning attached to a particular concept is dynamic and can only be understood in
its context, and therefore it gives substantial attention to the social, historical and
cultural circumstances. There are three premises to CSSI: members of society act
towards things according to their perceptions (meanings) of the phenomenon; the
perceptions are formed based on language (symbols) in their social interactions; and
their perceptions and actions are modified and handled through an interpretive process
when dealing with the phenomenon (Blumer, 1969). In other words, CSSI recognises
that society is not a homogeneous entity and assumes that understanding of society
requires understanding of the individuals making it up and vice versa (Meltzer et al.,
1975). According to Blumer (1969), CSSI recognises people as self-reflexive beings and
their behaviours are not only driven by forces within themselves (e.g. instincts, drives,
needs, etc.) or by external forces infringing upon them (e.g. political, social or economic
system, etc.), but also what lies in between. Hence, CSSI sees meanings as social
products derived from social interactions, i.e. the meaning of things for each individual
is formed in tandem with the context of his/her social interaction at various levels.
Three important concepts in CSSI include social interaction, joint action and
differential degree of power (Blumer, 1969). Based on the process of social interactions,
one learns to fit one’s own conduct to be in line with others who share the same world
view as a collective voice or by adjusting one’s conduct to fit with accepted norms. For
instance, auditors often have their own pre-conceived opinions regarding various
auditor-client relationships. When he/she encounters a new situation or rule, he/she
will redefine his/her opinion based on interactions with others, e.g. other auditors,
regulators, clients, etc., to fit his/her actions with others. Joint action represents the
collective conduct of diverse participants in the negotiation process when a new
situation arises. For example, auditors and their professional colleagues, through their
negotiation process, can take joint action to accept or reject new rules or recommended
practices. Although the meaning is formed through the process of interactions and
negotiations, the differential degree of power embedded within the structure and
institutions held by various actors may not only influence but also change the
meanings of the phenomenon. In other words, the change in meanings, and hence the
actions, may be attributed to the higher level of negotiation powers held by some actors
relative to others in the negotiation process (e.g. authority, political location, wealth,
intellect, etc.) and to changes in the environmental set surrounding the actors (e.g. new
economical discovery or innovation, etc.). Consider the audit firm: the managing
partner holds a position of formal authority over other firm personnel, has the power to
hire and fire lower level staff, and dictates certain matters to them. Thus, lower level
staff are put out of the realm of “negotiations” and will act accordingly to be in line
with expectations or take the exit route. Besides symbols, meanings and interactions,
another basic concept in symbolic interactionism is self-reflexivity. The self is highly
active and selective, having a major influence on its environment and itself. Language
and ability to interpret symbols enables individuals to see themselves from the
perspective of another and the content of self-concepts reflects the content and
organisation of society.
Symbolic interactionism has been applied in management accounting research.
Rosenberg et al. (1982) used a combination of participants’ own stories and observation
to understand the constructed roles and work attitudes of qualified accountants in the
UK local authorities that moved from the finance (mainstream) department to social
services (new segment) department. They found that those who moved to the new
segment have a newly shaped role and reciprocal impact on control procedures as well
as on other employees in the new segment. Tomkins and Colville (1984) used
observations and interviews in investigating how different conditions lead to different
individuals’ perceptions and attitudes on the public image of an accountant in two
organisations, i.e. police force and social services department. They found that
accountants are often referred to as a “policeman” who controls money spending and
holds individuals responsible for their actions through an established control system.
Nahapiet (1988) studied the resource allocation process within an area of the UK’s
National Health Service by combining the insights of interpretive theorising with
understanding the organisation and its operations as a whole. She paid particular
attention to language and other symbols for expressive purposes and concluded that
the new accounting both shaped and was in turn shaped by organisational reality (i.e.
reflexive relationship between accounting and organisational processes). Rosenberg
(1989) conducted interviews with selected treasurers in district boroughs and
non-metropolitan country councils, and attended meetings with the authority’s chief
officers to study the negotiating mechanism of resource allocation between politicians
and professionals. It was found that power differences between the two parties affect
the budget-setting process and that the power of treasurers was unrelated to the
commitment either to corporate planning or to the chief officers. Roberts (1989) studied
the relationship between managers and subordinates within an organisational context
where corporate targets increased competitiveness in managers. Based on a series of
observations and repeated interviews with one subordinate, the study revealed how a
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manager’s explicit goals and a subordinate’s personal ambition may be damaging to
the relationship.
Unlike most previous studies that adopted symbolic interactionism in investigating
the interactive meanings within an organisational context, we extend the theory to also
investigate the interactive meaning within a country context. Cohen et al. (1992) argue
that both cultural values and socio-economic conditions dominant in a particular
environment will affect perceptions and behaviour. They use Hofstede’s (1984) four
dimensions in addressing cultural values and two factors in the socio-economic
environment, i.e. level of development of the profession and availability of economic
resources, in their theoretical framework. Gendron et al. (2006) focus on the
commitment that practitioners manifest towards auditor independence. They found
accountants in Canada to be receptive to regulation as a control mechanism,
suggesting some reservation in self-applying ethical standards without regulatory
coercion. They further found type of accountants and audit firm as well as age, impact
on commitments to independence. Drawing on Geertz’s (1973) approach to culture
where meanings are simultaneously reflected in the personal (individual) and the
public (collective) domains, Kosmala (2007) shows how the construct of auditor
independence is influenced by cultural particularities and individual interpretations of
more general notions of independence, such as ideas of individual freedom, and
political and economic liberalism, as well as economic reality.
Similarly, in this study, we envisaged the notion of auditor independence to be
articulated within the set of characteristics that reflect a particular social reality. At the
country or macro level, factors such as the political and socio-economic structures and
ideational realm of culture such as societal values and norms, philosophy, religious
beliefs, and ethical principles, would set the boundaries within which actors interact
and develop their actions accordingly. Within an organisation or at the meso level,
interactions within an audit team and between auditors and their superiors may be
affected by the organisational culture. At the personal or micro level, self-reflexivity
will aid individuals in interpreting symbols and meanings and to see themselves from
the perspective of others. These factors are anticipated to impact on the interpretation
of the local meanings of independence. Figure 1 presents our conceptual framework.
Research method
As stated earlier, CSSI is an appropriate research methodology to adopt in studying
how auditors construct the meaning of independence in their daily rituals. In
conducting research based on the CSSI interpretive approach, the symbolic
interactionist must adhere to the following principles:
.
study the behaviour, the range and variety of symbols and meanings that are
shared, communicated and manipulated through the interactions of various
members;
.
an individual’s symbols and conceptions of self must be linked with the social
circles, groups and relationships that furnish him/her with those symbols and
conceptions;
.
the actor’s definition of the situation, his/her perception and interpretation of
reality and their relations to behaviour need to be discovered and interpreted; and
.
the behaviour setting of interaction and observation must be recorded.
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Figure 1.
Conceptual framework
Thus, methodologically, a combination of personal professional experience, document
analysis, participant observation and interviews is deemed appropriate to provide the
richest possible data for the purpose of this study. Research was conducted at two
audit firms[8], one with international links and the other local. Table I outlines some
important features of each firm.
Data collection
To familiarise ourselves with the country context and issues related to the concept of
auditor independence, we collected secondary data comprising various mass media
texts (newspapers, magazines, etc.), academic books, journals and research reports, as
well as archive data from various governmental and private agencies. We reviewed the
various documents to equip ourselves with background knowledge that would enable
us to conduct the interviews more meaningfully. Based on readings and background
knowledge gained, as well as experience with the cultural environment, we constructed
Audit Firm 1
No. of partners
Saudis
Foreigners
Total
No. of staff
Saudis
Foreigners
Total
No. of branches
Market share (%)
Audit services (%)
Non-audit services (%)
Audit Firm 2
2
0
2
2
5
7
15
25
40
2
10
5
5
95
200
295
3
23
7
16
Table I.
Features of audit firms
observed
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an interview protocol consisting of a list of broad topics with a few direct questions (see
the Appendix). The first part consists of questions to elicit the interviewees’ responses
on the meanings of auditor independence drawn from local rules and code of ethics. We
then asked questions that would lead us to make sense of some of the social constructs
of the independence concept.
A total of 12 days were spent in the two audit firms (six days in each firm). This
involved not only conducting formal interviews with 12 auditors at various levels but
also having informal conversation and observing auditors both at the workplace as
well as on field assignment. Not all aspects observed (e.g. auditor-client interactions)
are reported in this paper as we have limited our scope to only understanding their
notion of independence and AI in every day life.
As mentioned earlier, formal interviews with 12 auditors at different seniority levels
were conducted in two audit firms over a period of 12 days. The interviews were
conducted in Arabic (with a mix of English), each lasting between 45 minutes to two
hours, and were tape-recorded. Interviewees were asked to relate their views on the
issues, provide explanations, and give examples, with minimal intervention from the
interviewer, so that the interviewees were able to express their own inner thoughts in
their own words regarding the notion of auditor independence, i.e. how they socially
construct the meaning of AI in everyday life. Interviewees were then asked questions
related to the wider contextual ideas of political and socio-economic independence and
societal values. The interview tapes were transcribed in Arabic as soon as possible
after the interview while the conversation was still fresh in the mind of the researcher.
The transcripts were then translated into English (on average, 15-20 pages and
4,000-8,000 words). In transcribing and translating the Arabic text, an attempt was
made to keep to the style of the rhetoric, thus showing all imprecision, ambiguities and
inconsistencies, and also not to impose any interpretation of the texts at this stage.
Participant observation is a vital tool in studying the social world (Atkinson and
Hammersley, 1994), especially in interpreting the subjective meanings of language,
behaviour and interactions of various groups in a particular society. Hence, participant
observation is directly applied in this study by observing and writing notes of the
formal and informal social interactions that took place including having many
conversations with various individuals in the two audit firms. The researcher observed
and interacted with practitioners at each audit firm, both on-site (especially during
working hours and meal and prayer breaks) and off-site (during the engagement
visits), and noted the levels of social interactions, joint actions taken and degree of
power distance between members in the team. The general ambiance in the
organisation and the ways members interact and present themselves to others outside
the organisation, were also noted. The 12 days of observations produced 30 pages of
typewritten notes, mainly describing how independence was deciphered in everyday
life, with some anecdotes and quotations.
Data analysis
Since we are interested in interpreting the various patterns of meaning of independence
in a wider context, we used discourse analysis[9] as the mode in analysing the
transcribed texts, observation notes and documents. In interpreting the data, it is helpful
if the researcher has an understanding of the local “culture”[10] to make sense of the
repertoire of information collected. One of the researchers has lived and worked as an
auditor in the social environment, and this provided him with huge advantages in
participating and observing the phenomenon as a member of that society as well as a
professional group[11]. The “closeness and distance with the respondents both
emphatically and intellectually” helped the researcher to interpret the patterns of
meanings both as an “insider” and an “outsider”, thus reducing personal bias (Smircich,
1983; Alvesson, 2002). Figure 2 presents a summary of the data analysis process.
We first read the interview transcripts to get the overall impression and bridged it
with the contextual data. We then scanned the transcripts to identify, code and
categorise the data to get a general pattern of the respondents’ perceptions on various
implication issues. We gave every category and dimension numeric codes like 1.1, 3.4,
etc. We next compiled sets of text units for each construct by distinguishing and
codifying the text units from every transcript. We also included qualitative labels
for the analysis such as “strong-weak”, “high-low”, “satisfied-frustrated”,
“hopeful-pessimistic,” etc. Once coding was completed, common themes were then
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Figure 2.
Data analysis process
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drawn and meanings given to the selected texts, based on local context and cognitive
maps of shared understandings. We then extracted core summaries based on readings
of the interpretive accounts. We further reflected upon these accounts for cross-validity
(Alvesson and Skoldberg, 2000). Through the reflexive process, the data were
substantially reduced for analysis.
From the coded texts and analysis of keywords in context (Berelson, 1952;
Gottschalk and Gleser, 1969), we identified two dimensions of auditor independence
(independence in fact and independence in appearance). In interpreting the patterns of
meanings from a wide spectrum of reference points, we tried to incorporate the local
insights of environmental elements to map what auditor independence means in this
part of the world. From the analysis, we identified four dimensions of the general
notion of independence (political-ideological independence, legal or de jure
independence, business and economic independence, religious independence and
social independence). Table II presents a summary of our analysis and the constructs,
themes and dimensions of independence.
Discussion
Macro or country constructs of AI
The political and socio-economic life in Saudi Arabia was transmuted following one
major historical event – the discovery of oil, and consequently, development of close ties
with Western nations and the global capitalist system. The soar in oil price in the 1970s
saw the demise of the Islamic political principle of shura (consultation) and the
imposition of the new “bin-Saud ideology” on its people. To maintain its status quo, the
ruling family undertook measures that included controlling freedom of expression,
nationalising the media, and resettling of the different tribes in specific regions. The
ruling family also consolidated its power by ensuring that all key ministries are
administered by their family members, with others being held by members of different
tribes selected by the King, and more recently, influential families (the bourgeois class).
The dominance of the “bin-Saud ideology” is also reflected in the way the geographical
landscape (Saudi Arabia) and its people (Saudis) are addressed, implying that everything
belongs to the ruling family, the Bin-Saud. People owe duties to the ruling family and the
various forms of rights are granted only when the ruling family sees fit to do so. In such
an authoritarian regime, the rest of society is expected to succumb without resistance to
its “official” set of justifications, meanings and symbols, and there is less freedom to
express thoughts and views and to take necessary action (Pennock and Smith, 1965).
From our analysis, we detected two different views regarding how the lack of political
and ideological independence affects the construction of the meaning of AI. For instance,
some respondents define independence simply as a technical term that is not influenced
by the surrounding environment and one has to adapt to the autocratic milieu and
maximise benefits from it as expressed by the following respondent:
Listen, politics has nothing to do with our work. We are here to provide our expertise that will
help the clients and the government and I cannot see how my independence will be affected.
As long as everybody is happy, we should not care much about this idea of independence
[agitated].
In contrast, some respondents still believe the notion of independence to be very much
impacted by politics and mentioned how SOCPA, unlike the professional bodies in
Macro or country constructs
Independence de jure
Business and economic
independence
Religious independence
Legal system
Economy and business
Societal values
Social independence
Political and ideological
independence
Political ideology
Image management
Organisational culture
Level of commercial activities
Meso or organisational constructs
Independence in appearance
Ethical reasoning
Independence in fact
Teleological/consequentialism
(consider consequences over fairness
and rights)
Religious and deontological (appeal
to fairness and rights over
consequences)
Auditor reputation
Micro or personal constructs
AI dimension
Themes
Constructs
bin Saud, prince, bribery, corruption,
Wahhabism (Saudi religious ideology),
freedom, Saudisation, sword
Shariah (Islamic teachings), nizam (secular
law), justice, powerless judges, ignorant
judges, dual system
Liberal market, share ownership, dominant
managers, stock market, audit market, audit
fees tenurity, blood relationship, powerful
individuals
Islam, islah (reform), thaurah (revolution),
Shari’ah
Wassattah (unfair favours), cultural traits,
maaleesh (disrespect of time), secretive,
collectivism, family
Non-audit services, tax services,
book-keeping services
Work protocols, competence,
professionalism, audit quality, firm
reputation
Allah (God), Shari’ah (Islamic teachings),
akhirah (hereafter), ethics, morality, trust,
honest, principle-based, etc.
Receivership, inheritance, trust, honesty,
competence, objective
Self, interpretation of rules, profit, money,
finance, wealth, comfortable, etc.
Codes
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Table II.
Summary of discourse
analysis and dimensions
of AI
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developed countries which are more independent, influential and powerful, became the
tool in helping the government to achieve its political-economic agenda rather than
addressing local needs. Hence, they believe in putting pressure for reform as mentioned
by one of the respondents:
Here everything is down to politics and everything is secretive. Even SOCPA [Saudi
Organisation of Certified Public Accountant] is not independent . . . [of the government] we
need reform in the profession and this will not happen without change in the position of the
government. Until then, auditor independence will always be a big issue [frustrated].
The ruling family also exerts its power in the judicial and economic spheres of life. Its
close ties with western nations and the desire to participate in the global capitalist
economy saw an infiltration of western business values into the legal system as well as
other socio-economic institutions. The Shari’ah Islami’iah (Islamic teachings) that was
once the sole source of law governing the economy saw increasing encroachment of
secularised (non-religious) laws known as nizam (Vogel, 1993)[12] being passed by the
King, who also has ultimate power in appointing and expelling the judges. In such an
autocratic regime, it is common to find the legal institution being occupied by a small
body of persons who dictate policies upon the people, leaving very little room for other
groups to engage in the negotiation process, as solutions flow from top to bottom
(Pennock and Smith, 1965). It is widely recognised that auditing evolves based on the
legal environment within which it operates (Anderson et al., 1998), and this affects
judges’ assessments on auditor liability, fraud, and auditor independence. From the
interviews, we detected some resistance to the mix of religious and non-religious laws
including the current auditing code introduced by SOCPA as “it does not reflect our
values,” “not suitable for local conditions,” and “does not address our needs.” The
resistance to the current auditing code can be further classified into two types:
(1) not suitable for local environment as the stock market is less developed, the
legal system is weak and lacked independence, and businesses are controlled by
“powerful” families; and
(2) not reflecting Islamic values despite the state claiming to follow Shari’ah[13].
The lack of independence de jure also affects the implementation and adherence to
rules and regulations related to auditing, and consequently, the construction of the
meaning of AI. Since the laws were not constructed out of social negotiation and
through joint action due to differential degree of power, they often result in conflicting
actions and the current laws do not provide protection for auditors (no liability laws)
and the powerful groups in society always win, as mentioned by interviewees:
The rules here apply only on the weak party and the powerful party always get away as the
judge is on their side. So, maintaining independence here is down to your own ethical stand.
When the auditor has no ethical value, even if you have 1,000 legislations, you will never be
able to control the unethical behaviours. Worse still if you have 1,000 legislations but not
implementing them fairly . . . [laugh].
In the past, everyone including the government followed the Shari’ah in all aspects but now
Shari’ah only applies to inheritance and marital affairs. Everything is now halal [permitted],
even if it violates the Shari’ah, until a new nizam [secular law] is issued. Those with more
power can find loopholes to get away with all laws.
The powerful groups in Saudi society refer to particularly the Royal family, their
extended families, and to a lesser degree those having close working relationship with
them as well as families from certain tribes. These groups owned most of the
businesses in Saudi besides state shareholdings. The stock market was introduced to
lure the huge sums of petrodollars amassed in Saudi hands to benefit foreign
capitalists, as well as a small group of local capitalist élites, rather than the wider
society. The close link between the ruling family and this small group creates a
network of powerful individuals in society that auditors need to deal with. The
business and economic independence enjoyed by the powerful capitalist élites affects
the construction of the meaning of AI, as they often put pressure on auditors to act in
their interest, thereby disrespecting auditors’ professionalism. The following are
examples of quotes related to this aspect:
In our work, we often face dominant figures who want us to do something which is not right.
They seriously put us in awkward situation between following their view or our professional
duty. When you refuse, they will tell others that we are not a good audit firm and others
believe them . . . they get a one-sided picture of us [frustrated].
Let me tell you this. Many businesses here are owned by a number of wealthy families. If they
like you, you will get to audit their multi-companies and if they hate you, you will lose more
than just the audit fees! This makes you dependent on them, so to maintain your
independence, just eliminate the risk of being directly involved in their businesses [laugh].
To be honest with you, how can you expect me to maintain my independence when I have to
deal with powerful clients? If I qualify the audit report, I will not only lose that client but also
risk losing my other clients, especially if they are family business. Tell me what I should do?
From the quotes, it can be deduced that the lack of business and economic
independence resulting from unequal wealth distribution together with weak legal
system, professional body and pressure group to protect the powerless groups in
society, often result in exasperating compromises on AI.
Religion and family dominate the life of Saudis. Islam, as a way of life, dictates
practically every act and moment in life (Patai, 1952) and recognises man not only as
homo oeconomicus (economic man), but also homo ethicus (ethical man) and homo
religiosus (religious man). However, there currently exist two groups in society. Wealth
and exposure to western values have created an élitist group that is happy to adopt
secular lifestyle and abandon Islamic teachings. Incursion of western imperialism and
suppression of Islamic cultural identity caused the emergence of a group who would
like to see the return of the Islamic state (Islamists); one sub-group of this believe in
“revolution” while another sub-group, which is the majority, believe in reforming the
status quo. A low degree of harmonisation in the norms and values between and within
groups and lack of religious independence affects the construction of the meaning of
AI. Our analysis revealed tension between the two groups as the more powerful secular
group disregarded the Islamist interpretation of independence in all spheres of life
including business and the profession. Furthermore, as mentioned earlier, SOCPA gets
full backing from the government and secular group in society to achieve their
international political-economic agenda rather than responding to the local needs.
Family is the centre of community in Saudi society (Hamady, 1960). The individual
is responsible for the wellbeing of his family, and his behaviour in various life
situations is mainly an expression of his family patterns[14]. The less powerful
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members of the family often rely on the more powerful ones. Wasstah (mediation), i.e.
seeking favourable decisions through one of the official’s favoured persons, cronyism
and nepotism, are normal and dynamic forces in daily activities (Helms, 1981). Such
interdependence caused Saudis to get used to being partial and subjective in assigning
jobs, distributing wealth and other benefits, and even in making judgements. Wasstah
and nepotism are virtues in Saudi culture (Kay, 1982), and it is shameful for the
individual Saudi to refuse to help when asked. The lack of social independence affects
the construction of the meaning of AI, as auditors sometime need to adjust their
behaviour to suit others due to family pressure.
In short, the various cultural factors discussed in this section reflect not only the
wider notions of independence but also their impact on the construction of the
meanings of AI. Through social interactions with elements in their macro environment
where differential degree of power in society is large making it difficult to take joint
actions to bring about changes, auditors construct their meanings of AI accordingly.
Besides social interactions at the macro level, interactions also occur at the
organisational level between auditors, and this affects their construction of the
meaning of AI, as discussed next.
Meso or organisational constructs of AI
When interviewees were asked to define AI, the definition given often relates to the
concept of “independence in appearance,” as in the following:
. . . avoiding situations that would cause others to question the auditor’s state of
independence.
The code says that independence is not to have financial interest in the client, not to have
blood relationships with clients . . . [providing a whole list of safeguards in the ethical code].
From our analysis, organisational culture[15] has an impact on the interviewees’
construction of the meaning of “independence in appearance,” and we identified two
themes to have the greatest influence: image management and level of commercial
activities. Through organisational social interactions or socialisation, members adopt
the values, norms, beliefs, and assumptions that will permit them to participate as
effective members of the organisation and to take joint actions to resolve problems. It
also implies that members may need to relinquish certain personal attitudes, beliefs,
values and behaviours, and be left out of the realm of negotiations due to differential
degree of power. A unitary cohesive organisational culture around core moral values
may be imposed by some organisations but less so in others. We observed interesting
differences between the two audit firms in our study, especially in terms of their “work
protocols” in maintaining the image or reputation of being independent in their
everyday life.
In Audit Firm 1, the “independence” manual contains all documents (IFAC, AICPA
and SOCPA) and internal memos from audit partners providing further explanation or
comments. All staff are required to sign a sheet acknowledging that they have seen and
are aware of the latest independence issues, and to inform the office regularly of any
changes to their independence position with the client or any new situations that may
impair the audit team’s independence. The audit partner makes the final decision on
any issues brought up by the audit manager, even sometimes on issues that seem
trivial. For instance, the researcher was with the audit team at a client’s premise and
there was a year-end party. The audit team was invited, as there was plenty of food,
and in Saudi culture, it is considered rude to refuse invitations. The audit manager
immediately called the audit partner and was told by the partner to establish whether
the party was planned before knowing the date of the visit or after, but clearly stated
that he would prefer the team not to join the party. The audit team did not attend the
party and had lunch elsewhere. The researcher also noticed that the dress code for all
staff is the traditional “thoub” (white long dress with head gear), all stationery does not
have the company’s name or logo, and none of the staff are allowed to carry business
cards. When the researcher asked why such dress code is implemented, the reply was
“to reflect our cultural identity and not to appear different from the rest of society.” In
short, practitioners in Audit Firm 1 seldom take joint actions in making decisions,
differential degree of power is obvious in this firm, and their social interactions is very
much influenced by local culture. The audit partners adhere strictly to local values and
cannot tolerate even trivial situations that they think may harm their independence
image, and this sometimes frustrates some junior staff that have not yet been fully
acculturated with the work ethos in the organisation.
On the other hand, in Audit Firm 2, the “independence” manual consists of
documents required by IFAC and AICPA, and there was a separate manual labelled
“SOCPA”. When the researcher asked one of the staff why the SOCPA’s code of ethics
was not included in the independence manual, he remarked:
What is in the SOCPA’s code of ethics can be found in IFAC and AICPA, they are just
translation [sarcastic smile].
The researcher noticed that all staff in Audit Firm 2 are in business suits, they are
allowed to carry and distribute their business card, and all stationery has the
company’s name and logo. Audit managers are encouraged to make suggestions of
potential services that can be offered before the audit partners visit the clients. They
(audit managers) are given flexibility to assess situations related to independence, and
only cases that cannot be resolved will be brought to the attention of audit partners
who will assess the situation and often make decisions based on pragmatism. For
instance, an audit manager told the researcher of a case where he was asked by an
audit client to assess the acquisition value of a company which had used the services of
the audit firm, and he was the one who audited the target company. He raised the issue
with the audit partner, who then explained the conflict of interest situation to the
managers of the two companies. Both managers insisted on the service of the auditor
and, eventually, the audit firm provided due diligence service despite the impairment of
independence. In general, social interactions in Audit Firm 2 does not adhere strictly to
local norms, staff can take joint actions to resolve issues and make decisions, and
degree of power distance is less within the organisation. In other words, the approach
to image management of independence in appearance in Audit Firm 2 is more
accommodating.
Besides differences in image management, the level and variety of commercial
activities in the organisation affects the meaning of independence in appearance.
Interviewees in both audit firms understand the need to “distance” themselves from
situations that may cause others to suspect their objectivity, and some interviewees
mentioned that the safeguards in the ethical code serve as a useful checklist in
maintaining independence in appearance. However, some interviewees acknowledged
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the problems related to the increasing shift from accountancy’s traditional
jurisdictions, i.e. financial accounting services and auditing, to consultancy, as
explained by one of the audit partners in Audit Firm 2:
Maintaining independence is getting difficult these days; if you offer audit services, you are
expected to distance yourself, but if you offer consultancy services, you need to work closely
in order to give the best advice. So, you need to trade-off between independence and fees from
non-audit services.
In other words, the wider the range of lucrative business activities offered by the audit
firm, the more difficult it is for the firm to maintain independence, as remarked by one
of the audit partners in Audit Firm 1:
Everyone tries to pinch clients, they charge low audit fees to get higher income from the more
lucrative consultancy services, they don’t care about independence, they want to make money
. . . Wallahi [swearing in God’s name], I’ve seen all their tactics . . . you need to have a strategy
to protect your firm’s independence reputation [serious and frustrated].
Although the meaning of independence in appearance is associated with maintaining
the organisational independence image, auditors also need to interpret their actions
based on their personal values, and this is discussed next.
Micro or personal constructs of AI
Self-reflexivity is an important element in enabling individuals, through their social
interactions, to interpret language and symbols to build an opinion or perception of a
particular concept such as AI. Our analysis suggests that an individual’s
self-reflexivity (self-reflection, self-awareness at a moment in time, and
communicative flexibility) develops not only through own intuitions, but also
through organisational and social configurations. When interviewees were asked what
AI means, our analysis of the various responses revealed two important themes
associated with the dimension “independence in fact”: ethical reasoning and reputation.
We found auditors working in Audit Firm 1 using rhetoric such as follows:
Independence in auditing is to work without any pressure from anyone and not to link the
quality of your work with the amount of fees. You do your best, because you fear Allah [God].
[Independence] is to be adl [just] when carrying out your duties . . . not to think of your own
interest and to stand firmly against any pressure [recite verse from Qur’an ].
It is about being honest with yourself and not afraid to voice your disagreement even if this
means losing clients.
The above rhetoric suggests a slight contrast to the Anglo-American meaning of
independence as “an attitude of mind”, as they emphasised religious rather than
general morality judgment. The meaning of AI for interviewees from this group is
commonly expressed using words such as “fear of Allah”, “justice”, “honesty”, “firm”,
“not afraid of losing clients”, and citing verses from Qur’an and Hadiths (sayings of the
prophet Muhammad), etc. The rhetoric seemed to be ingrained in all staff who shared a
similar world view with one of the audit partners, who has built a reputation for
himself as an “honourable man” with strong religious convictions. Staff expressed
contentment of working in the firm because they share a similar worldview with the
founding audit partner and, in fact, is proud to be associated with the audit firm, as
expressed by one of the interviewees:
Our audit partner is well known for his reputation as someone trustworthy and he is also
aware of Shari’ah [Islamic teaching] . . . he is our role model . . . the final goal is to produce
quality work and fear Allah, not money. Alhamdulillah [thank God] our audit firm has
succeeded in establishing quality name and I am proud of this. That is why we are asked to
handle many receivership and inheritance cases.
In other words, through self-reflexivity, auditors in this firm construct the meaning of
independence in fact through collective moral/religious and emotional reasoning, to be
in line with the worldview of the audit partners.
On the other hand, those working in Audit Firm 2 relate AI mainly to integrity,
competency and efficiency, and often make reference to the “professional code” and
“interpretation of situations” when describing AI:
It [AI] is free to give opinion based on what you think is right depending on the situation you
faced [pause] and the code of ethics serve as guidance.
[Independence] is to follow the rules in the code.
The above examples suggest two frames of mind exist among auditors in Saudi
Arabia: those who use personal judgement in interpreting the code based on their
religious conviction or other form of moral principles and those who adhere to what is
dictated in the codes (rule-based). Self-reflexivity for most individuals in Audit Firm 1
is based on religious interpretation while those in Audit Firm 2 seemed to be associated
more towards adhering to the code and exercising mindfulness of the firm’s
interpretations of “ethical and unethical” behaviour. We further understood from some
interviewees in Audit Firm 2 that they are expected to consider “consequences” and
“potential damages” and to “exercise economic rationality” when making decisions, as
mentioned by one of the interviewees:
None of this rule works if it means the firm will be losing money.
We also found individual reputation to be less important than firm’s reputation, and
the “self world view” is less significant in Audit Firm 2 compared to Audit Firm 1.
Conclusions
This paper provides insights and interpretations of the meaning of AI in the context of
an oil-rich autocratic state with an ideology straddling liberal market capitalism and
Shari’ah, which has not been explored in previous studies. The insights and
interpretations are drawn from document analysis, observations and interviews with
auditors at two audit firms, one with international affiliation and the other is local.
Our contextual analysis at the macro or country level indicates the meanings of the
concept of AI to a large extent are being associated with the various cultural
dimensions. In Saudi Arabia, all affairs are controlled by the ruling family and most of
its citizens do not enjoy freedom of expression and their human rights are often
violated. Corruption is also high. The lack of political and ideological independence
created a culture of fear, frustration and helplessness among its citizens who do not
endorse such a regime. In such an environment, professionalism and societal needs are
not respected and efforts to change the status quo by the marginalised group in society
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are almost impossible. Similarly, lack of legal independence leads some auditors to
construe the meaning of AI to be “doing what is considered best for both parties and
that it would be foolish not to take advantage of any loopholes in the regulation,” while
others still believe in “resisting and putting pressure for reform” to maintain
independence and socio-economic justice. The business and economic independence
enjoyed by a small group of dominant personalities in society impact on the
construction of the meaning of AI, as the individual auditor are often forced to
succumb to the pressures and demands of the powerful élitist group to stay in
business. Dependence on powerful family conglomerates for business together with
weak professional body to support auditors result in some auditors feeling frustrated
and helpless unless they have strong willpower and self-control and not afraid of losing
potentially lucrative business. Similarly, the lack of religious independence in
conducting business activities based on Shari’ah is frustrating for some auditors. In
the same vein, lack of social independence meant auditors need to deal with pressures
of wasstah and nepotism in maintaining AI.
At the meso or organisational level, the meaning of independence in appearance is
largely influenced by the organisational culture of the audit firm. In one audit firm, we
found the organisational culture to be more conservative, with high degree of power
distance, and AI is maintained through a cohesive socialisation process around a
number of rigid core values, often based on religious convictions. On the other hand,
the organisational culture of the second audit firm is more flexible and pragmatic with
less degree of power differentiation, and AI is interpreted based on the context of the
complexity of the situation often using economic rationality. At the personal level,
independence in fact is often related to personal reputation and understanding of the
local culture and religious norms rather than the name of the audit firm and general
ethics.
Understanding the nature of the broad symbolic realities helps us to understand
why there exist some resistance to the Anglo-American concept of AI among some
auditors and the need for adaptation of such concept to be in line with religion and
needs of wider Saudi society. Table III presents a summary of the differences in
Anglo-American and Saudi Arabian context and the effect on the meanings of AI.
From the various interpretations of the construction of the meanings of AI in Saudi
Arabia, it can be deduced that the Anglo-American concept of AI is appreciated by
local capitalists and their foreign collaborators to maximise their interests. However, it
is perceived as undesirable by the majority in society who locate religion as the focal
point when performing their duties, including the lived meanings of AI. This created
tension between two dominant groups in society – the “Islamists” and the seculars or
“liberals”. In short, AI is not merely a technical concept, but also a cultural concept and
for it to be effective in the context of Saudi Arabia, the following need to be addressed:
freedom of expression, adoption of Islamic ethical values, reflection of societal needs,
tackling corruption, having competent judges and having a more independent and
influential professional body.
One limitation of our paper is that we focused only in understanding the
construction of the meanings of AI based on interactions at the macro, meso and micro
levels and did not distinguish how different social, religious, cultural, firm and
personal factors affect perceptions of AI when faced with specific situations of conflict.
Hence, it would be interesting for future study to explore this aspect.
Capitalist; strong capital
market providing protection
to shareholders and creditors;
strong professional
accounting bodies
Economy, capital market, business
environment and status of
professional accounting bodies
Oil-based with strong foreign
interest; weak capital market
providing protection to only
a group of capital élitists;
weak local professional
accounting bodies
Dual legal system and judges Lack of independence de jure and operations of two
conflicting legal rules (selective implementation of
lack of independence and
expertise in business affairs Shari’ah and favouring application of Nizam)
caused implementation of rules difficult and
sometimes unreasonable, as they are not the
outcome from negotiations and consultations other
then to serve the powerful in society. Auditors are
not immune by law if they choose to act beyond
what is desired by the ruling family
Strong and independent
Legal system
Lack of economic independence caused local
capitalists and their foreign collaborators to create a
network of professionals, including accountants
willing to serve their own interests. Weak capital
market, dominance of powerful business élites and
weak local professional accounting body
constrained auditors’ professionalism (e.g.
professional judgements, independence) and
increased their business and economic dependence
on powerful clients
(continued)
Lack of political and ideological independence in
the autocratic regime constrains freedom of
expression causing individuals to either adapt and
serve the interest of powerful group and in the
process maximise their benefits, or to resist and put
pressure for reform to establish socio-economic
justice
Autocratic
Democratic
Effect of Saudi context on AI
Political and ideological system
Saudi Arabia
Anglo-American
Context
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Table III.
Summary of differences
in Anglo-American and
Saudi context and effect
on meanings of AI
Secular individuals adhere to SOCPA’s secular
Two types: professional
Professional ethical
standards and accountable to ethical standards and Islamic standards, permitting one discourse i.e. state
correctness of financial statements to shareholders
ethics
only shareholders
in operationalising independence in fact
Religious individuals adhere more to Islamic ethics
when faced with conflicting situations and
accountability extended to God and society in
operationalising independence in fact
Individual ethical reasoning
Cultural imperialism influence individuals working
in internationally linked firms to mimic their
counterparts in operationalising independence in
appearance
Strong beliefs in local culture and values influence
individuals working in local firms to coerce and
adhere to local norms in operationalising
independence in appearance
Two types: mimetic for firms
with international links and
coercive and normative
isomorphism for local firms
More coercive, less power
distance; encourage task
independence
Organisational culture
Lack of social independence resulting from wasstah,
nepotism and cronyism constrained auditors’
professionalism
The ruling family and its
cronies represent the
imperialist culture
(psycho-hedonism doctrine);
majority of society are
collectivist
Effect of Saudi context on AI
Highly individualistic
Saudi Arabia
Social structure
Table III.
Anglo-American
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Notes
1. For instance, the founder of Arthur Andersen was known to have gained reputation of
trustworthiness by refusing to endorse some companies’ distorted financial statements
(Squires et al., 2003; Toffler and Reingold, 2003).
2. This is largely attributed to high commercialism activities, especially with regard to the
range of management advisory services, including almost any service that could generate
revenues (Wyatt, 2004).
3. There has been a shift in focus of research in this area but the positivist approach remained
as the dominant research method. In the 1980s and 1990s, the focus was on exploring the
perceptions of interested parties on various auditor-client relationships. Following many
corporate scandals in late 1990s and early 2000s and lose of confidence in the integrity of
auditors, research concentrated on one aspect of auditor-client relationship, namely,
management advisory services or non-audit services.
4. The Arabian Gulf states refer to Saudi Arabia, Kuwait, Bahrain, United Arab Emirates,
Oman and Qatar.
5. The interpretive line of thought is also known as the Kantian/Fichtean approach (Laughlin,
1995).
6. According to the 2007 Corruption Index, Saudi Arabia was ranked at 79th place, followed by
Kuwait (60), Oman (53), Bahrain (46), UAE (34) and Qatar (32) (www.infoplease.com/ipa/
A0781359.html).
7. Symbolic interactionism consists of three approaches: Goffman (Dramaturgical), Kuhn (Iowa
School) and Blumer (Chicago School). The dramaturgical approach narrowly focuses on
human behaviour and ignores other wider factors that may affect their lives. The Iowa
School is attracted by positivist research methods and tend to operationalise human
behaviour. The Chicago School pays more attention on how meanings are constructed based
on interactions between people and their environment.
8. We are grateful to these two large audit firms that gave one of the researchers the
opportunity to conduct the research.
9. Discourse analysis is viewed as “a system of texts that brings objects into being” (Hardy,
2001, p. 26).
10. The concept of culture for the purpose of this paper refers to social, political and other factors
that influence individuals’ behaviour.
11. CSSI sceptics often question the reliability in the interpretation of meanings by the
interactionist i.e. emic or etic. One of the authors was born in that culture and worked as an
auditor for several years before moving to Britain ten years ago. This facilitates better
understanding of the pattern of meanings, as the researcher is “both emphatically and
intellectually distant from and close to the subject” (Alvesson, 2002, p. 131).
12. According to Vogel (1993), the Shari’ah judiciary code is based on microcosmic
interpretation (i.e. appraising the case against the divine command of revealed texts),
while the commercial law is substantially based on macrocosmic interpretation (i.e.
sanctions not of individual conscience but of a world-existing institution or collectivity, such
as in judicial precedent or a jury as commonly found in the West).
13. Those who hold this view based their argument on the Quranic verse: “If any do fail to judge
by what Allah hath revealed, they are wrong-doers” (Al-Ma’ida, 5:45)
14. Lipsky (1959, p. 45) succinctly describes the typical Saudi Arabian family as follows:“All
social relations in Saudi Arabia are indirectly if not directly tied to family considerations and
the family is the fundamental and essential repository of every individual’s personal identity
. . . In practice, family obligations take the precedence over all others.”
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15. Organisational culture has been recognised as one of the determinants of how people behave,
more or less ethically, in an organisation (Sinclair, 1993).
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Appendix. Interview guide
Personal background
Age, qualification, nationality, experience, position.
General issues
.
Description of the concept of AI.
.
Importance of AI.
.
Specific examples where there may have been problems with AI?
AI issues: auditor-client relationship
.
Effect of expressing a qualified opinion.
.
Client’s understanding of AI.
.
Importance to client for auditors to be independent.
AI issues: regulations
General attitude towards regulations/professional guidelines:
.
awareness of auditing standards and ethical code;
.
compliance and satisfaction of current auditing standards;
.
feelings on current ethical code;
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.
.
adherence to ethical codes; and
particular areas of concern.
AI issues: personal independence
.
level of professionalism and competence;
.
personal vs societal interest; and
.
religious/moral vs. economic rationality, etc.
AI issues: political, socioeconomic and cultural values
Impact of political ideology and legal system on AI:
.
meaning of being a Saudi; and
.
functioning of legal system, etc.
Impact of socioeconomic institution on AI:
.
.
.
characteristics of business environment;
change in economic ideology; and
regulatory bodies, etc.
Impact of societal values on AI:
.
.
power distance; and
collectivism, etc.
Corresponding author
Mohammad Hudaib can be contacted at: [email protected]
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